Medicare

Medicare is the federal health insurance program for people age 65 and older, people under age 65 with disabilities and people with End-Stage Renal Disease (ESRD).

Medicare covers various medical services, like hospital stays and doctor visits, and supplies like blood glucose test strips. Prescription drug coverage is also available under Medicare.

Different services and supplies are covered under different parts of the Medicare program, which are outlined below. Medicare does not cover everything and for many covered services you pay a portion of the cost, unless you have another insurance plan that pays for part or all of the patient cost-sharing. Below is some information regarding Medicare Part A, Part B, Part D, Medicare Advantage and Medigap.

For more information, call 1-800-MEDICARE (800-633-4227) or visit www.medicare.gov.

There are 2 main ways to get Medicare coverage—Original Medicare (Part A and Part B) or a Medicare Advantage Plan (Part C).

Medicare Part A

How Much Does it Cost?

Most people do not have to pay a monthly premium for Medicare Part A because they or a spouse paid Medicare taxes while working. If you do not qualify for premium-free Part A, you may be able to purchase the coverage. Call your local Social Security office, or Social Security's main number at 1-800-772-1213 for more information about buying Medicare Part A coverage.

If you aren't eligible for premium-free Part A, and you don't buy it when you're first eligible, you may have to pay a late enrollment penalty. Contact Medicare at 1-800-MEDICARE (800-633-4227) for more information.

For services you use under Part A, you may be charged a deductible and/or portion of the costs. In 2014, the Part A deductible is $1,216 ($1,260 in 2015) per benefit period and depending on the length of your hospital stay you may pay additional coinsurance.

More information on Part A costs and covered benefits is available at www.medicare.gov or by calling 1-800-MEDICARE (800-633-4227).

Medicare Part B

Medicare Part B (medical insurance) provides coverage for medically necessary doctors' services, outpatient care, durable medical equipment, lab tests, preventive care and some medically necessary services not covered by Part A (including some physical and occupational therapy services and some home health care).

Medicare Part B covers blood glucose monitors, blood glucose test strips, lancet devices, lancets, and glucose control solutions for beneficiaries with diabetes, whether or not they use insulin, but the amount covered varies.

Beneficiaries with diabetes who use insulin may be able to get up to 300 test strips and 300 lancets every three months. Beneficiaries with diabetes who don't use insulin may be able to get up to 100 test strips and 100 lancets every three months. If your doctor says it is medically necessary, you can get additional quantities of testing supplies. Additional documentation is required. [Note: See information below about the National Mail-Order Program for Diabetes Testing Supplies].

Medicare Part B covers insulin pumps and pump supplies (including the insulin used in the pump) for beneficiaries with diabetes who meet certain requirements. Effective January 1, 2014, insulin pumps and pump supplies (but not insulin) are included in the Medicare Competitive Bidding Program in 9 areas of the U.S. This means beneficiaries in these 9 areas with Original Medicare (not Medicare Advantage) generally must use a Medicare contract supplier for Medicare to help pay for these items. Learn more about the program here or by calling 1-800-MEDICARE (800-633-4227).

Some preventive care is covered by Part B, including diagnostic screenings for diabetes and cardiovascular disease, obesity screening and counseling, and glaucoma tests.

Medical nutrition therapy and diabetes self-management training are covered benefits for people with diabetes. Some beneficiaries may also qualify for coverage of therapeutic shoes.

A one-time "Welcome to Medicare" physical exam is covered within the first 12 months of Part B coverage. An "Annual Wellness Visit," which includes the creation (or update) of a personalized prevention plan, is available every 12 months after the first 12 months of Part B coverage or after receiving a Welcome to Medicare physical exam.

How Much Does It Cost?

Medicare enrollees who elect Part B coverage pay a monthly premium. This premium can change from year to year. In 2014, most people have a monthly Part B premium of $104.90 (this amount won't change in 2015), although if your income is above a certain amount you may pay more. The Social Security Administration can verify the exact amount of your monthly premium. You can contact Social Security at 1-800-772-1213.

Additionally, if you enroll in Medicare Part B, you will have to meet a deductible before Medicare will begin to pay its share. In 2014, the Part B deductible is $147 (this amount won't change in 2015). After that, in general Medicare will pay 80 percent of the Medicare-approved cost of your medically necessary supplies and services. For some preventive services, the deductible and/or coinsurance will be waived.

More information on Part B costs and benefits is available at www.medicare.gov or by calling 1-800-MEDICARE (800-633-4227).

You do not have to enroll in Medicare Part B. However, if you decline to enroll when you are first eligible, or if you drop Part B and then get it later, you may have to pay extra for the coverage. Your monthly premium may increase by 10 percent for each 12 month period that you could have had Part B but did not sign up for it. You may have to pay this late enrollment penalty for as long as you have Part B, unless you meet certain conditions. Call 1-800-MEDICARE (800-633-4227) for more information.

Medicare National Mail-Order Program for Diabetes Testing Supplies

On July 1, 2013, a Medicare National Mail-Order Program for diabetes testing supplies went into effect.

The mail-order diabetes supplies included in the National Mail-Order Program are:

blood glucose test strips

lancets

lancet devices

batteries

control solution

Beneficiaries who want their diabetes testing supplies delivered to their home must use a Medicare national mail-order contract supplier. Beneficiaries also have the option to pick up their testing supplies from a local store (local pharmacies or storefront suppliers) enrolled in Medicare.

Medicare Advantage (Medicare Part C)

Some beneficiaries choose Medicare Advantage plans instead of Medicare Part A and B (the "Original Medicare Plan"). A Medicare Advantage Plan is a type of Medicare health plan offered by a private insurance company that contracts with Medicare to provide you with all your Part A and Part B benefits. Because Medicare Advantage plans are private insurance plans, they come in all shapes and sizes. Out-of-pocket costs vary depending on the plan. Most plans offer prescription drug coverage and plans may offer extra benefits that are not covered under Parts A and B (but you may pay extra for them).

How Much Does it Cost?

Medicare Advantage plans can charge different out-of-pocket costs and have different rules for how beneficiaries access services, such as you must go to only doctors, facilities or suppliers that belong to the plan for non-emergency care.

In addition to the Part B premium, Medicare Advantage plan enrollees usually pay a monthly premium for the plan.

People who have Medicare Parts A & B are generally eligible for Medicare Advantage if they live in the service area of the plan they want to join.

To find out more about Medicare Advantage plans, including when you can join a plan or change plans, visit www.medicare.gov or call 1-800-MEDICARE (800-633-4227).

Medicare Part D

Medicare Part D is the prescription drug program available to all Medicare beneficiaries. Under Part D, beneficiaries choose a Prescription Drug Plan run by a private insurance company approved by Medicare. Note: Most Medicare Advantage plans offer prescription drug coverage so some beneficiaries with a Medicare Advantage plan may get drug coverage that way instead.

Part D coverage is optional and you are not required to sign up for it. But, if you choose not to join a Medicare Prescription Drug Plan when you are first eligible, and you don't have other creditable prescription drug coverage, you may have to pay a late enrollment penalty if you decide to sign up in the future. [Note: Medicare Part B does not generally cover prescription drugs, aside from those administered by a physician and insulin used in an insulin pump].

Each Medicare Prescription Drug Plan has its own list of covered drugs (called a formulary). Many plans place drugs into different "tiers" on their formularies. Drugs in each tier have a different cost.

Medicare drug plans cover insulin not used in an insulin pump and can cover other drugs necessary to treat diabetes. In addition to providing prescription drug coverage, Medicare Part D plans may cover supplies necessary to inject insulin, including syringes, needles, alcohol swabs and gauze. Check the formulary to see which drugs and supplies are covered by each plan and how much it costs.

Tip: Compare Part D plans to see how well they will serve your needs. You may wish to make a chart for yourself comparing what you will pay under each plan you are interested in. When choosing a Part D plan, make sure that the plan formulary includes all of the drugs you take (including your insulin and other diabetes medications) and the insulin injection supplies you need, and ask if there are any limits. Also make sure the pharmacies you like to use are included in the plan network.

How Much Does it Cost?

Most Medicare drug plans charge a monthly premium that varies by plan (separate from the Part B premium you may already be paying), plus some out-of-pocket expenses for your medications. The average monthly premium for a basic prescription drug plan is $31 in 2014 (and is estimated to be $32 in 2015).

Some drug plans also have a deductible that you must first pay before the plan begins to pay its share of covered drugs. When comparing plans, consider the cost of the deductible plus the cost of each drug you need, and ask if there are any limits. Compare Part D plans to find the plan that is right for you.

Most Medicare drug plans have a coverage gap (also called a donut hole). This means after you and your drug plan have spent a certain amount for covered drugs, in 2014, you are responsible for paying 47.5 percent of the plan's cost for covered brand-name prescription drugs and 72 percent of the cost for generic drugs while you are in the coverage gap. In 2015, you are responsible for paying 45% of the plan's cost for covered brand name drugs and 65% of the cost for generic drugs while you are in the coverage gap.

As a result of the Affordable Care Act, additional savings will occur each year for people in the coverage gap through 2020, when the gap will not exist anymore.

For more information on Part D, call 1-800-MEDICARE (800-633-4227) or visit www.medicare.gov. Visit Medicare's Extra Help Program page, which helps people with limited income pay for prescription medications, or contact 1-800-MEDICARE (800-633-4227).

Medigap (Medicare Supplement Insurance)

A Medigap policy, sold by private insurance companies, can help pay some of the health care costs ("gaps") that Original Medicare doesn't cover, like copayments, coinsurance, or deductibles.

Some Medigap policies also offer coverage for services that Original Medicare doesn't cover, like coverage for medical care when you travel outside the U.S.

Every Medigap policy must follow federal and state laws designed to protect you, and it must be clearly identified as "Medicare Supplement Insurance."

Beginning in 2013, Medigap insurance companies can sell you only a "standardized" Medigap policy identified in most states by letters (Plans A through N). [Note: In Massachusetts, Minnesota, and Wisconsin, Medigap policies are standardized in a different way.]

Medigap plans have a monthly premium, in addition to the monthly premium you pay for Part B.

For more information, including information on when you can buy a Medigap plan, call 1-800-MEDICARE (800-633-4227) or visit www.medicare.gov.

Another resource is the Medicare publication: "Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare" available at www.medicare.gov/Publications/Pubs/pdf/02110.pdf or by calling 1-800-MEDICARE (800-633-4227). You can also contact your state's department of insurance to get more information.

Note: Some people have Medicare and other health insurance or coverage, like retiree health insurance from a former employer or Medicaid. Visit www.medicare.gov or call 1-800-MEDICARE (800-633-4227) for more information on how different forms of insurance work with Medicare.

Open Enrollment: A Chance to Make Changes

Medicare Open Enrollment occurs every fall between October 15 and December 7. During this time, people with Medicare can review their current health care and prescription drug coverage options and can make changes to their Part D prescription drug plan, Medicare Advantage plan, or switch between Original Medicare with a stand-alone Part D plan and Medicare Advantage.

Even if you are happy with your prescription drug plan, it is important to reexamine your Part D coverage each year during Fall Open Enrollment to make sure it still meets your needs, as plans typically change their costs and list of covered drugs (known as a formulary) at the start of each year. Call 1-800-MEDICARE (800-633-4227) or visit www.medicare.gov for more information.

How to Learn More

For more information on all of the options available under Medicare, visit: www.medicare.gov or call 1-800-MEDICARE (800-633-4227). Also look for the Medicare and You handbook which Medicare mails to beneficiaries in the fall and is available by calling 1-800-MEDICARE (800-633-4227).

Free health insurance counseling and personalized assistance for Medicare beneficiaries is available in every state through the State Health Insurance Assistance Program (SHIP). Call 1-800-MEDICARE (800-633-4227) or visit shipnpr.shiptalk.org/shipprofile.aspx to find the telephone number of the SHIP office closest to you.